2012 (5) TMI 583 - AT - Income Tax

Summary

Issues involved:
The judgment involves the deletion of an addition made by the Assessing Officer u/s 69 of the Income-tax Act, 1961 on account of unexplained investment in property. The primary issue is whether the addition of Rs. 74 lacs is justified based on the facts and circumstances of the case.

Facts and Decision:
The case involved a search u/s 132 of the Income-tax Act, 1961 at the premises of Gopal Zarda group, including the assessee. The Assessing Officer noticed that the assessee acquired a property for Rs. 51 lacs, which was let out at a monthly rent. The AO estimated the purchase consideration at Rs. 1.25 crores and added Rs. 74 lacs u/s 69 of the Act. However, the CIT(A) deleted the addition based on the year of taxability, lack of evidence, and reliance on estimate and conjecture.

The CIT(A) held that the investment related to the financial year 2006-07 and the sale deed formalized it in 2008. The AO's estimate was based on conjecture without concrete evidence. The valuation report was not submitted, and no seized document corroborated the additional payment. The CIT(A) emphasized that deeming provisions should be strictly interpreted, and without positive evidence, the addition was not sustainable in law.

Appellate Tribunal's Decision:
The Revenue appealed against the CIT(A)'s decision. The Tribunal noted that the property was purchased in the preceding year, not the year under consideration. As no evidence of additional investment was found during the search, the addition was solely based on estimation. The Tribunal dismissed the appeal, citing the lack of evidence to support the addition and the primary burden of proof on the Revenue to prove understatement of income.

The Tribunal highlighted the absence of incriminating evidence post-search and upheld the CIT(A)'s decision to delete the addition. The appeal was dismissed, with the Tribunal emphasizing the Revenue's failure to provide contrary evidence or arguments to challenge the CIT(A)'s findings.

Conclusion:
The Tribunal upheld the CIT(A)'s decision to delete the addition of Rs. 74 lacs, emphasizing the lack of concrete evidence, reliance on estimation, and the absence of incriminating evidence post-search. The appeal by the Revenue was dismissed, affirming the CIT(A)'s decision based on the facts and legal principles involved.